Brokerage account agreements usually require arbitration after misconduct losses. Your claim typically proceeds through Financial Industry Regulatory Authority (FINRA) arbitration. Haselkorn & Thibaut, P.A., operating as Investment Fraud Lawyers, represents investors nationwide in these specialized proceedings.
We know the rules, the arbitrators, and the defenses firms raise because our partners are former Wall Street defense attorneys.
Our firm brings 95+ years of combined attorney experience to every case. We have a 98% success rate and have been involved in more than $520 million of securities cases. We work on contingency, which means you pay nothing unless we recover money for you. If you suspect your broker caused investment losses, call 1-888-885-7162 for a free case review.
What is FINRA arbitration?
The Financial Industry Regulatory Authority, or FINRA, runs a private dispute-resolution forum for investor claims against brokers and brokerage firms. Almost every brokerage account agreement contains a mandatory arbitration clause. That clause generally requires customers to file claims through FINRA rather than in court.
FINRA arbitration is similar to a court trial but usually faster and less formal. An impartial arbitrator or panel hears evidence, reviews documents, and issues a binding award. The process is governed by the FINRA Code of Arbitration Procedure for Customer Disputes. Awards are final and binding, with very limited grounds for appeal.
Arbitration is not mediation. Mediation is voluntary and helps parties reach a settlement. Arbitration results in a decision that can be enforced like a court judgment. Most brokerage agreements require arbitration for disputes, so investors usually must use this forum to seek money damages.
Why FINRA arbitration exists
Congress created the arbitration system to provide an efficient way to resolve securities disputes. Brokerage firms favored arbitration because it reduces court congestion and gives parties with specialized knowledge a role in decision-making. Investors benefit from a forum with trained arbitrators who understand industry practices and rules.
Over time, arbitration has become the dominant forum for investor claims. FINRA Dispute Resolution Services administers the process, provides arbitrator lists, schedules hearings, and enforces procedural rules. It is the only forum authorized to handle arbitration claims against FINRA member firms and their associated persons.
How the FINRA arbitration process works
Every case follows a predictable path, although the timeline varies with the size and complexity of the claim. Here is how a typical investor claim moves from initial review through final award.
| Step | Typical timeframe | What happens |
|---|---|---|
| Free case review | 1–2 weeks | We review your statements, account history, and broker communications to identify rule violations and estimate damages. |
| Statement of claim | 2–4 weeks | We file a written complaint with FINRA that names the respondents, states the facts, and specifies the relief requested. |
| Answer and discovery | 2–4 months | The firm responds, and both sides exchange documents and identify witnesses through FINRA discovery procedures. |
| Arbitrator selection | 1–2 months | FINRA provides lists of potential arbitrators, and the parties strike and rank candidates until a panel is seated. |
| Hearing and award | 12–16 months total | The panel hears testimony, reviews evidence, and issues a binding award. Many cases settle before the final hearing. |
The Securities and Exchange Commission (SEC) Investor Bulletin: Broker-Dealer/Customer Arbitration addresses arbitration timing. Arbitrators usually issue an award within 30 days after the hearing ends. The award is final and binding on both parties. A party may move to vacate it in limited circumstances under the Federal Arbitration Act.
FINRA filing fees and simplified arbitration
FINRA charges a filing fee based on the amount in dispute. Claims of $50,000 or less can use simplified arbitration. The arbitrator may decide the case on the papers unless the investor requests a hearing. The filing fee schedule for customer claims is set out in FINRA Rule 12900.
| Amount of claim | Customer filing fee | Simplified option |
|---|---|---|
| $0.01 – $1,000 | $50 | Yes |
| $1,001 – $2,500 | $75 | Yes |
| $2,501 – $5,000 | $175 | Yes |
| $5,001 – $10,000 | $325 | Yes |
| $10,001 – $25,000 | $425 | Yes |
| $25,001 – $50,000 | $600 | Yes |
| $50,001 – $100,000 | $975 | No |
| $100,001 – $500,000 | $1,425 | No |
| $500,001 – $1,000,000 | $1,740 | No |
| Over $1,000,000 | $2,025 – $2,300 | No |
Filing fees are only part of the cost picture. Hearing session fees, arbitrator deposits, and discovery-related fees may also apply. In the final award, the panel may order the brokerage firm to reimburse some or all of the investor’s fees and costs. Our firm advances these costs on your behalf during the case.
Who decides the case?
The arbitrator or panel is selected from FINRA’s roster of trained arbitrators. For claims over $100,000, a panel of three arbitrators usually decides the case. At least one panelist must be a public arbitrator who is not affiliated with the securities industry.
For smaller claims, a single arbitrator may preside. Simplified arbitration is available for claims of $50,000 or less. It allows the arbitrator to decide the case based on written submissions unless the investor requests a hearing. This option can be faster and less expensive for straightforward cases.
What claims can be filed in FINRA arbitration?
Investors can bring a wide range of claims in FINRA arbitration. Common allegations include unsuitable investment recommendations, churning or excessive trading, and unauthorized trading. They also include misrepresentation or omission of material facts, breach of fiduciary duty, failure to supervise, overconcentration, and negligence.
Claims may be based on FINRA rules, federal securities laws, state laws, or common-law duties. The specific rules involved depend on the misconduct. For example, FINRA Rule 2111 governs suitability, while FINRA Rule 3110 addresses supervision. The claim must be timely, and the damages must be supported by evidence.
What you can recover
FINRA arbitrators can award several types of relief. The amount depends on the facts of the case, the strength of the evidence, and the damages proven. Our firm works with forensic accountants and industry experts to document every category of loss.
- Net out-of-pocket losses — the principal you lost due to the misconduct.
- Interest or lost opportunity — compensation for the time your money was unavailable.
- Rescission — a return of your original investment as if the transaction never occurred.
- Attorneys’ fees and costs — in some cases, the panel orders the firm to pay these.
- Punitive damages — available in cases of especially egregious conduct.
Advantages and limits of FINRA arbitration
FINRA arbitration offers several advantages over court litigation. It is usually faster, more confidential, and less expensive than a federal lawsuit. Discovery is more limited, which can reduce cost but also requires careful preparation. The award is final and binding, with only narrow grounds for court review.
The main limit is that arbitration is generally required by your account agreement. You cannot choose to sue in court unless the agreement allows it or a court finds the clause unenforceable. The good news is that most investors recover meaningful compensation through the arbitration forum when they have strong legal representation.
Why choose our firm
We are not a general practice firm that occasionally handles a securities case. Investment fraud recovery is our sole focus. Our partners defended major Wall Street firms before switching sides to represent investors. That background gives us an advantage in anticipating firm defenses, selecting arbitrators, and negotiating settlements.
We have a 98% success rate and have been involved in more than $520 million of securities cases. We represent clients in all 50 states from offices in Florida, New York, Arizona, Texas, and North Carolina. Every case is handled on a contingency fee basis.
Related practice areas
- Unsuitable investment claims
- Churning and excessive trading
- Breach of fiduciary duty
- Private placement fraud
- Overconcentration
Frequently asked questions
How long do I have to file a FINRA arbitration claim?
FINRA rules generally allow a claim to be filed within six years of the event giving rise to the dispute. However, shorter state statutes of limitations may apply, and the sooner you act, the stronger your evidence will be.
Do I have to go to court?
No. Most brokerage agreements require disputes to be resolved through FINRA arbitration. The hearing is held before an arbitrator or panel, not a judge or jury, and the award is binding.
Can I represent myself in FINRA arbitration?
Yes, but investors with legal representation generally recover more and avoid procedural mistakes. We advance case costs and work on contingency, so you pay nothing unless we recover money for you.
What if my broker already left the firm?
You can usually still pursue the firm. Brokerage firms are generally responsible for the conduct of their brokers under agency principles and FINRA supervision rules.
How much does FINRA arbitration cost?
Filing fees range from $50 for small claims to $2,300 for claims over $5 million, plus hearing session fees. Our firm advances these costs and is reimbursed only if we recover money for you.
This page is for informational purposes only and does not constitute legal advice. Past results do not guarantee future outcomes.